Supermarket chain warned over misleading promotion

The Commerce Commission has issued a warning to the supermarket company Progressive Enterprises over what it says were misleading promotions on the price of beer.

The commission says that last year and the year before, Progressive offered customers savings of 20-25% on all beer sold at its Countdown, Foodtown and Woolworths supermarkets.

It says however that Progressive deducted the 20-25% from what it called the standard shelf price, which had not actually applied to beer for as long as eight months.

The commission's general manager of competition, Kate Morrison, says that's not good enough.

"We believe an advertising programme of that nature should be an accurate representation," Ms Morrison says.

"(If) I read that there's a 20% discount, I think it's reasonable to expect that that's a discount to the price I would otherrwise pay. In a number of promotions there was not a 20% discount to the recently applied price."

The commission says customers might reasonably have inferred the cuts would come off the price of beer immediately before the promotion came into effect, or off the usual price.

Ms Morrison says Progressive Enterprises cooperated with the investigation and was let off with a warning.

Progressive says it did not set out to mislead customers. It points out that the commission noted such practices are fairly widespread in the retail sector and is considering how to address sector-wide issues with retailers.